Acer already offers a PDA, based on Windows CE. It's not yet clear whether the Palm-based machines will replace the CE devices or be offered alongside them.

The financial terms of the deal were not disclosed, but an Acer spokesman has said that the arrangement will be formally announced on 1 June, just before Computex, Taiwan's leading IT exhibition.

"A top Palm executive will arrive for the event," said the spokesman.

No wonder. With the success of Compaq's iPaq putting the spotlight on Microsoft's PDA platform and Palm's own woes prompting investors to question the company's future, Palm needs all the support it can get. ®